Richest 1 pct sucking up quarter of NZ's wealth - Oxfam

The rich are getting richer and ultra-rich are winning the most, Oxfam's latest report on inequality has found.

It's calling for an overhaul of the tax system, after its research found the richest 1 percent of Kiwis sucked up 28 percent of all the wealth created last year.

The 1.4 million people who make up the poorest 30 percent, on the other hand, got 1 percent.

"2017 was a global billionaire bonanza. This is not a sign of success, but of economic failure," said Rachael Le Mesurier, Oxfam NZ executive director.

"Trickle-down economics isn't working. The extreme gap between the very rich and the very poor in our country is shocking."

Graeme Hart.
Graeme Hart. Photo credit: File

New Zealand's richest man Graeme Hart added another $3.1 billion to his fortune in 2017, Oxfam says. Between them, Mr Hart and second-richest man Richard Chandler are wealthier than 1.4 million Kiwis combined.

"Labour's Tax Working Group and the opportunity it provides New Zealand to examine the structure, fairness and balance of the New Zealand tax system, is a huge opportunity to ensure our economy reflects the fairness that is innately Kiwi," said Ms Le Mesurier.

"It also offers an opportunity for New Zealand to provide an example to many developing countries in using a fairer tax system to reduce the extreme gap between the very rich and the very poor."

She said the wealthy are using their "disproportionate control of resources" to influence politicians into passing policies "geared towards their interests" on a global scale.

World stocks have been rising rapidly in the past year, providing huge gains in wealth for people who own shares in companies. A US study in 2013 found fewer than half of families own shares, and the vast majority are owned by a tiny fraction of people.

The OECD has previously said inequality hurts economies. In 2014, it said New Zealand had missed out on billions in economic growth between 1990 and 2010 because of the growing gap between rich and poor. Then-Finance Minister Bill English rejected the report.

Last year's Oxfam report on inequality was criticised as focusing too much on wealth, and not enough on earnings potential. Pro-business think tank the NZ Initiative said a recently graduated doctor, for example, would be counted as extremely poor, having amassed a large student debt - despite their massive earnings potential.

Oxfam's new report, Reward Work, Not Wealth, is out Monday afternoon.